Italy's Flat Tax for New Residents: How the 300,000 Euro Regime Works

What the regime dei neo residenti is, and who it is for

Article 24-bis of the TUIR, introduced by the 2017 budget law, offers a straightforward bargain. Move your tax residence to Italy and, instead of paying Italian progressive tax on your worldwide income, you pay a single fixed sum each year that settles everything you earn outside Italy. The Italian press calls it the flat tax for the wealthy, international advisers call it the Italian non-dom regime because it echoes the old British non-domiciled system, and the statute calls it an imposta sostitutiva, a substitute tax. The design tells you who it is for. Because the amount is a flat sum and not a rate, somebody with two million euro of foreign dividends and somebody with twenty million pay exactly the same. The regime therefore suits entrepreneurs who have sold a business, families living on international portfolios, and people whose income sits in funds, trusts and companies outside Italy. It does nothing at all for income earned in Italy, and below a certain level of foreign income it simply costs more than ordinary taxation would.

The amount: 300,000 euro, and why the figure depends on the year you moved

For anyone who transfers tax residence to Italy from 1 January 2026, the substitute tax is 300,000 euro for each tax period. The 2026 budget law (legge 30 dicembre 2025 n. 199) raised it from the 200,000 euro that applied to transfers between 11 August 2024 and 31 December 2025, which had itself replaced the original 100,000 euro in force since 2017. The figure is set by the year in which you become resident, so people already inside the regime continue at their own amount for the remainder of their fifteen years. Payment is made in a single instalment by the deadline for the balance of Italian income tax, on form F24 under the tax code the Agenzia delle Entrate has assigned to this regime, and the substitute tax is not deductible against any other tax. Because it does not scale, its effective rate falls as foreign income rises: the arithmetic only works above the point where ordinary Italian tax on that same foreign income would exceed the flat sum. That calculation belongs at the start of the project, not after the move.

What the flat tax covers, and what stays under ordinary Italian tax

The flat sum covers all income produced abroad, identified by the mirror rule in article 165 of the TUIR: foreign dividends, interest, capital gains, rent from property outside Italy, foreign pensions, royalties, profits from a business run abroad through a permanent establishment. Three side effects matter almost as much as the tax itself. While the option runs you are exempt from the foreign asset reporting duty (quadro RW of the Italian return) and from IVIE and IVAFE, the Italian levies on foreign real estate and foreign financial assets, and Italian inheritance and gift tax applies only to assets and rights located in Italy for successions opened and gifts made during the option. Italian-source income is outside the deal entirely. Rent from a Florence apartment, a salary or a directorship paid by an Italian company, gains on shares in Italian companies: all of it is taxed under ordinary progressive IRPEF rules, on top of the 300,000 euro. There is one further carve-out. Capital gains on qualified participations in non-resident companies realised in the first five tax periods of the option are excluded and taxed normally, an anti-avoidance rule meant to stop someone moving to Italy purely to sell a large foreign shareholding cheaply and then leaving. You may also leave one or more countries out of the regime, the practice known as cherry picking under article 24-bis comma 5, for instance to preserve a treaty benefit or a foreign tax credit. The choice has to cover all income produced in that country, and it is one-way: once a country is excluded the decision cannot be reversed, and later changes can only add more countries.

The nine-of-ten-years test, and how Italian tax residence is established

The entry condition is negative: you must not have been tax resident in Italy for at least nine of the ten tax periods preceding the first year of the option. Citizenship is irrelevant. What counts is where you were tax resident, so an Italian who has genuinely lived abroad for a decade can use the regime on returning, while a foreign national who spent a recent year registered in Italy cannot. You then have to become resident, and since 2024 the test in article 2 of the TUIR reads differently from the one many people remember. For the greater part of the tax period, counting fractions of days, so more than 183 days in an ordinary year, you must have in Italy either your residenza under the civil code, or your domicilio, now expressly defined as the place where your personal and family relations principally take place, or simply your physical presence. Registration with the anagrafe of your comune, in Florence the Comune di Firenze, is now a rebuttable presumption of residence rather than a conclusive one. In practice the Agenzia delle Entrate looks at the whole picture: where your home and your family are, where the children go to school, where cars and utilities are registered, where your days are actually spent. A Florence address on paper with a life still lived elsewhere is the weakest possible position, both for entering the regime and for defending it years later.

Adding your family at 50,000 euro each

The option can be extended to family members within the meaning of article 433 of the Italian civil code, which covers a spouse, children, parents and other close relatives. Each of them pays 50,000 euro a year, up from 25,000 under the earlier figures, and each has to satisfy the nine-of-ten-years condition on their own account. A spouse who was tax resident in Italy three years ago does not qualify, however long the main applicant was away. The extension is requested by the main beneficiary and declared in the tax return, and it can be added for a family member in a later year, up to the end of the fifteen-year window. The link runs both ways. If the main beneficiary revokes the option or loses the regime, the family members lose it too, but any of them can then step up as a main beneficiary in their own right, paying the full amount for whatever remains of the original fifteen years.

How to opt in: the tax return, the ruling, the payment

The option is exercised in the Italian tax return, the Modello Redditi Persone Fisiche, for the tax period in which you transferred your residence to Italy, or in the return for the following tax period. In it you declare that you were non-resident for nine of the preceding ten years, the country or countries of your last tax residence, any countries you wish to exclude, and the items of the check list the form contains. Alongside the return sits the interpello, a written ruling request asking the Agenzia delle Entrate to confirm that you meet the conditions. Article 24-bis ties it to the option and fixes its deadline: it goes in by the filing deadline for the return of the tax period in which you move your residence to Italy, so it always comes before the option and never after. You can file it while you are still abroad, and the answer then has effect only if you do become resident in the year you indicated. Under the Statuto dei diritti del contribuente the answer binds every arm of the tax administration, limited to the question raised and to the person who asked, and it cannot be appealed. Whether your own file has to go through it is the first question for your commercialista: a tangled residence record over the last ten years, or a complex structure behind the foreign income, is exactly the case where the ruling pays for itself. Timing matters more than paperwork. Pay the substitute tax by the income tax balance deadline and state the option in the return. If the payment was made on time but something in the return went wrong, ask your commercialista straight away whether the omission can still be cured. The payment deadline itself is far less forgiving.

Fifteen years, revocation, and how people lose the regime

The option lasts a maximum of fifteen years from the first tax period of validity and cannot be renewed. Someone entering in 2026 is covered up to and including 2040. When the fifteen years end, foreign income returns to the ordinary Italian tax base and the extension to family members ends with it, whatever length of time they individually enjoyed. You may revoke the option freely at any point. You lose it automatically in two situations: if the substitute tax is not paid, or is paid only in part, by the balance deadline, with effect from the tax period the payment was due for; and if you move your tax residence out of Italy, with effect from the year you cease to be resident. The consequence is heavier than most people expect. Revocation or forfeiture permanently bars you from opting in again, not even as a family member of another beneficiary.

Florence in practice: visa, home, and the mistakes that cost the most

The flat tax is a tax regime, not an immigration status, and it gives a non-EU citizen no right to live in Italy. The usual pairing is the elective residency visa, the visto per residenza elettiva, a long-stay visa for people who can support themselves in Italy on passive income without working there, applied for at the Italian consulate covering your legal residence abroad. Italy also runs an investor visa for those entering through qualifying investments. EU citizens need no visa and simply register with the comune. The order never changes: the right to be in Italy first, then the anagrafe registration and the facts of residence, then the tax option in the return. Buying a home in Florence creates neither of those. Property gives you no visa and does not by itself make you a tax resident. What it does create is Italian obligations: IMU on the property, ordinary Italian tax on any rent it produces, and, if you claim the prima casa purchase relief, an undertaking to move your residence to that comune within the period the law allows. Under this regime the house sits firmly on the Italian side of your affairs, taxed normally, while the flat tax quietly settles everything abroad. The recurring mistakes are predictable. Moving first and calculating afterwards, when the foreign income was never large enough to justify the flat sum. Assuming Italian rental or company income is covered. Forgetting that the regime cannot be renewed after fifteen years. Registering an address in Florence while the family, the school and the working week stay abroad. And confusing this regime with its neighbours: the impatriati regime is a different instrument, aimed at people who move to Italy in order to work here, and it reduces tax on employment or self-employment income produced in Italy for a limited number of years; the 7 percent regime under article 24-ter of the TUIR is for holders of a foreign pension who settle in small municipalities in the south, in regions such as Sicily, Calabria, Puglia or Abruzzo, and it runs for the year the option takes effect and the nine that follow. Tuscany is not part of it, so in Florence it is simply not on the table.

Checklist: the flat tax for new residents

• Count back ten tax years and confirm at least nine of them outside Italian tax residence
• Have a commercialista compare the flat sum against ordinary Italian tax on your real foreign income
• Settle the immigration side first: elective residency visa for non-EU citizens, comune registration for EU citizens
• Settle the preventive interpello with your commercialista and file it before the option, never after
• List the family members joining at 50,000 euro each and test each one against the nine-of-ten rule
• Plan the move so the residence test, more than 183 days, is met in the year you intend
• Keep Italian-source income separate: it is taxed normally on top of the flat sum
• Pay the substitute tax by the income tax balance deadline and state the option in the return